FLOW INTERNATIONAL CORP 
By KENT, Wash., March 1, 2012 /PRNewswire/ -- Flow International Corporation (NASDAQ: FLOW), the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications, today reported results for its fiscal 2012 third quarter ended January 31, 2012.
For the third quarter of fiscal year 2012, Flow reported consolidated revenues of $65.8 million, a 15% increase from $57.5 million in the prior fiscal year. Net income in the current quarter was $3.3 million or $0.07 per share. In comparison, the Company reported net income in the prior-year period of $1.2 million or $0.03 per share.
Adjusted EBITDA for the quarter was $8.1 million or 12.3% of sales, compared to $4.9 million in the year-ago quarter. A reconciliation of Adjusted EBITDA to Net Income is provided in the accompanying financial tables.
"This marks our sixth sequential quarter of increased sales and a new quarterly record for Flow," said Charley Brown, President and CEO of Flow. "We also generated operating income in excess of 9% of sales, which represents our highest level of profitability in almost four years."
Operations Review for the Third Quarter of Fiscal 2012
-- Standard segment sales, which include sales of systems that do not
require significant custom configuration as well as parts and services
for those installed systems, were $59.1 million, an increase of $9.2
million or 18% from the year-ago quarter.
-- Advanced segment sales, which include sales of complex aerospace and
application systems requiring specific custom configuration and advanced
features, were $6.7 million, a decline of $0.8 million or 11% from the
year-ago quarter. Advanced segment sales are recorded using the
percentage of completion method, with lead times generally ranging from
12 to 24 months.
-- Aggregate gross margins were 40% for the quarter, which was consistent
with the year-ago quarter. Standard segment gross margins were 41%,
which is down from 42% in the year-ago quarter as a result of product
mix. Advanced segment gross margins were 27% in the current quarter, in
line with the year-ago quarter.
-- Total operating expenses for the quarter were $20.1 million, consistent
with $20.3 million in the year-ago quarter.
Conference Call
Flow plans to hold a conference call to discuss these results today: Thursday, March 1, 2012 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The conference call may be heard by dialing 888-846-5003 or 480-629-9856. A 7-day replay will be available following the call by dialing 800-406-7325 or 303-590-3030. The conference call passcode is 4516393. A live audio Webcast of the conference call may be found in the investor section at www.flowwaterjet.com. A Webcast replay of the call will also be available for 90 days.
About Flow International
Flow International Corporation is the world's leading developer and manufacturer of industrial waterjet machines for cutting and cleaning applications used in multiple industries including automotive, aerospace, job shop, surface preparation, and more. For more information, visit www.flowwaterjet.com.
This press release contains forward-looking statements relating to future events or future financial performance that involve risks and uncertainties. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements but their absence does not mean that the statement is not forward-looking. These statements are only predictions and actual results could differ materially from those anticipated in these statements based on a number of risk factors, including those set forth in the Company's filings with the U.S. Securities and Exchange Commission. Forward-looking statements in this press release include, without limitation, statements regarding the Company's level of sales and profitability. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement.
Contact:
Flow Investor Relations
Geoffrey Buscher
253-813-3286
investors@flowcorp.com
Flow International Corporation
Condensed Consolidated Income Statements
(Unaudited)
U.S. Dollars in thousands, except per share
data
Three Months Ended January Nine Months Ended January
31, 31,
% %
2012 2011 Change 2012 2011 Change
---- ---- ------- ---- ---- -------
Sales $65,808 $57,473 15% $190,371 $156,988 21%
Cost of Sales 39,737 34,381 16% 115,864 94,710 22%
------ ------ ------- ------
Gross Margin 26,071 23,092 13% 74,507 62,278 20%
------ ------ ------ ------
Operating Expenses:
Sales and Marketing 12,028 11,568 4% 36,806 33,049 11%
Research and Engineering 2,712 2,513 8% 8,079 7,095 14%
General and Administrative 5,342 6,194 (14%) 17,312 17,811 (3%)
----- ----- ------ ------
Operating Expenses 20,082 20,275 (1%) 62,197 57,955 7%
------ ------ ------ ------
Operating Income 5,989 2,817 NM 12,310 4,323 NM
Interest Expense, net (305) (397) (23%) (876) (1,182) (26%)
Other Income (Expense), net (384) (81) NM (511) 315 NM
---- --- ---- ---
Income Before Taxes 5,300 2,339 NM 10,923 3,456 NM
Provision for Income Taxes (2,041) (1,058) 93% (4,279) (2,926) 46%
------ ------ ------ ------
Income from Continuing Operations 3,259 1,281 NM 6,644 530 NM
Income (Loss) from Discontinued
Operations, net of Income Tax 57 (40) NM 162 (152) NM
--- --- --- ----
Net Income $3,316 $1,241 NM $6,806 $378 NM
====== ====== ====== ====
Basic and Diluted Income Per Share:
Income from Continuing Operations $0.07 $0.03 NM $0.14 $0.01 NM
Net Income $0.07 $0.03 NM $0.14 $0.01 NM
Weighted Average Shares Outstanding Used in Computing Basic and Diluted Income Per Share
(000):
Basic 47,857 47,301 47,730 47,168
Diluted 47,857 47,312 47,730 47,174
NM = not meaningful
Flow International Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
U.S. Dollars in thousands
January April
31, 30,
%
2012 2011 Change
---- ---- -------
ASSETS
Current Assets:
Cash $10,185 $9,096 12%
Receivables, net 47,247 47,082 -%
Inventories, net 34,280 28,609 20%
Other Current Assets 12,471 13,305 (6%)
------ ------
Total Current Assets 104,183 98,092
Property and Equipment, net 17,380 19,104 (9%)
Other Long-Term Assets 34,218 35,867 (5%)
Total Assets $155,781 $153,063
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes Payable $- $5,500 (100%)
Current Portion of Long-Term
Obligations 26 25 4%
Accounts Payable and Other Accrued
Liabilities 26,885 28,661 (6%)
Other Current Liabilities 24,782 22,775 9%
------ ------
Total Current Liabilities 51,693 56,961
Other Long-Term Liabilities 8,132 7,925 3%
Subordinated Notes 9,362 8,723 7%
Total Liabilities 69,187 73,609
====== ======
Shareholders' Equity 86,594 79,454 9%
Total Liabilities and Shareholders'
Equity $155,781 $153,063
======== ========
Flow International Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
U.S. Dollars in thousands
January January
31, 31,
%
2012 2011 Change
---- ---- -------
Cash Flows from Operating Activities:
Net Income $6,806 $378 NM
Adjustments to Reconcile Net Income to Cash Provided by
Operating Activities:
Depreciation and amortization 4,723 4,706 -%
Deferred Income Taxes 2,437 1,585 54%
Provision for Slow Moving and
Obsolete Inventory 391 649 (40%)
Bad Debt Expense 389 346 12%
Incentive Compensation Expense 1,783 1,855 (4%)
Warranty Expense 3,043 1,304 NM
Other 881 787 12%
Changes in Operating Assets and
Liabilities:
Receivables (1,883) (3,902) (52%)
Inventories (7,129) (5,990) 19%
Other Operating Assets (944) (402) NM
Accounts Payable (738) 348 NM
Other Operating Liabilities (467) 2,522 NM
---- -----
Net Cash Provided by Operations 9,292 4,186 NM
----- -----
Cash Flows from Investing Activities:
Expenditures for Property,
Equipment and Intangible Assets (3,346) (2,700) 24%
Other Investing Activities 538 (1,632) NM
--- ------
Net Cash Used in Investing
Activities (2,808) (4,332) (35%)
------ ------
Cash Flows from Financing Activities:
Borrowings Under Credit Facility 45,750 35,100 30%
Repayments Under Credit Facility (51,250) (33,550) 53%
Other Net Borrowings (Repayments) 27 (8) NM
--- ---
Net Cash (Used in) Provided by
Financing Activities (5,473) 1,542 NM
------ -----
Effect of Changes in Exchange
Rates 78 238 (67%)
Net Change in Cash and Cash
Equivalents 1,089 1,634
Cash and Cash Equivalents,
Beginning of the Period 9,096 6,367 43%
Cash and Cash Equivalents, End of
the Period $10,185 $8,001 27%
======= ======
Supplemental Disclosures of Cash Flow
Information
Cash Paid during the Period for:
Interest 261 288 (9)%
Taxes 588 476 24%
NM = not meaningful
Flow International Corporation
Supplemental Data
(Unaudited)
U.S. Dollars in thousands
Three Months Ended January Nine Months Ended January
31, 31,
% %
2012 2011 Change 2012 2011 Change
---- ---- ------- ---- ---- -------
Sales Breakdown:
Systems $46,780 39,987 17% $130,913 $105,429 24%
Consumable Parts 19,028 17,486 9% 59,458 51,559 15%
Total $65,808 $57,473 15% $190,371 $156,988 21%
======= ======= ======== ========
Segment Revenue Breakdown:
Standard $59,076 $49,916 18% $171,267 $135,619 26%
Advanced 6,732 7,557 (11%) 19,104 21,369 (11%)
$65,808 $57,473 15% $190,371 $156,988 21%
======= ======= ======== ========
Depreciation and Amortization
Expense $1,572 $1,522 3% $4,723 $4,706 -%
Capital Spending $995 $1,551 (36%) $3,346 $2,700 24%
NM = not meaningful
Flow International Corporation
Reconciliation of Adjusted EBITDA to Net Income
(Unaudited)
U.S. Dollars in thousands
Three Months Ended January Nine Months Ended January
31, 31,
2012 2011 % Change 2012 2011 % Change
---- ---- -------- ---- ---- --------
Net Income $3,316 $1,241 NM $6,806 $378 NM
Add Back:
Depreciation and
Amortization 1,572 1,522 3% 4,723 4,706 -%
Income Tax Provision 2,041 1,058 93% 4,279 2,926 46%
Interest Charges 317 418 (24%) 937 1,268 (26%)
Non-Cash Charges (i) 868 687 26% 2,092 1,700 23%
Adjusted EBITDA $8,114 $4,926 65% $18,837 $10,978 72%
====== ====== ======= =======
(i) Allowable Add Backs Pursuant to Credit Facility
Agreement
NM = not meaningful
The Company defines Adjusted EBITDA as net income, determined in accordance with
accounting principles generally accepted in the United States of America ("GAAP"),
excluding the effects of income taxes, depreciation, amortization of intangible
assets, interest expense, and other non-cash charges, which includes such items
as stock-based compensation expense, foreign currency gains or losses, and other
non-cash allowable add backs pursuant to the Company's Credit Facility Agreement.
Adjusted EBITDA is a non-GAAP financial measure and the presentation of this non-
GAAP financial measure is not intended to be considered in isolation or as a
substitute for the financial information presented in accordance with GAAP. The
items excluded from this non-GAAP financial measure are significant components of
the Company's financial statements and must be considered in performing a
comprehensive analysis of the overall financial results. The Company uses this
measure, together with GAAP financial metrics, to assess its financial
performance, allocate resources, evaluate the overall progress towards meeting its
long-term financial objectives, and assess compliance with its debt covenants.
The Company believes that this non-GAAP financial measure is useful to investors
and analysts in allowing for greater transparency with respect to the supplemental
information used in the Company's financial and operational decision making. The
Company's calculation of Adjusted EBITDA may not be consistent with calculations
of similar measures used by other companies.
SOURCE Flow International Corporation
